On March 18th the United States Department of Labor (DOL) released a report confirming widespread violations of fundamental labor rights in key Peruvian export sectors that supply the U.S. market with billions of dollars of goods annually. The report was issued six months after the ILRF and Peruvian unions filed a complaint under the U.S. – Peru Trade Promotion Agreement (PTPA) asking the U.S. Government to investigate pervasive labor abuses taking place in Peru’s export garment, textile, and agro-industrial sectors.
In the report, DOL expresses “serious concerns” that Peru’s Non-Traditional Export Promotion Law, which allows large Peruvian exporters to employ their entire workforces on an unlimited series of short-term contracts, fails to protect workers’ fundamental right to organize as required under the PTPA. The report describes how the tens of thousands of workers subject to the export promotion law frequently do not have their contracts renewed if they join a union.
DOL’s analysis echoes critical statements made in recent years by the International Labor Organization (ILO) and even major multinational corporations, including Nike, New Balance, and PVH, about how the Non-Traditional Export Promotion Law encourages Peruvian employers to violate workers’ right to freedom of association.
The report also highlights significant problems with Peru’s labor law enforcement more generally, including inadequate staffing levels in the labor inspectorate, long delays in administrative and judicial enforcement processes, and the inability of the labor inspectorate to compel employers to comply with fines or reinstatement orders.
Despite these findings, the report failed to include detailed plans on how the U.S. Government will ensure Peru fulfills its obligations under the PTPA. A number of recent reports, including a 2014 study released by the General Accounting Office (GAO), have raised concerns about the U.S. Government’s monitoring and enforcement of the labor standards contained in its free trade agreements. A complaint filed against Guatemala under the Central American Free Trade Agreement (CAFTA) in 2008 took six years to reach the arbitration phase and still has not been resolved.
“We welcome the strong findings contained in the report, but remain concerned about the lack of a clear timetable for ensuring Peru’s timely compliance. The U.S. Government should set a firm deadline after which they will pursue formal dispute resolution measures under the PTPA,” said Eric Gottwald, ILRF’s Legal and Policy Director.
The report’s findings also raise new questions regarding the labor rights record of another member of the Trans-Pacific Partnership (TPP), the Obama Administration’s proposed mega-trade deal involving the U.S., Peru, Mexico, Vietnam, and eight other countries. Unless Peru adopts the necessary reforms it will be out of compliance with the TPP’s labor chapter, which is broadly similar to the one found in the PTPA.